QIBs bid aggressively for SBFC Finance’s IPO which is subscribed 70x

• The QIB portion of the issue was subscribed almost 193 times on the last day of the issue.
• Non-institutional investors too showed good interest as this portion was subscribed 49x.
• The company raised ₹304.43 crore from anchor investors like ADIA, Axis Mutual Fund, Birla Mutual Fund and more.

SBFC Finance’s public offer was subscribed by 70 times over the shares on offer, on the last of the issue. Qualified Institutional Buyers (QIBs) bid aggressively for the issue and this portion was subscribed almost 193 times, by the end of Monday.

The ₹1,025 crore IPO closed on Monday.

Non-institutional investors too showed good interest as this portion has been subscribed 49 times. The retail portion was also subscribed by around 11 times

The company raised ₹304.43 crore from anchor investors last Wednesday. Some of its anchor investors include Abu Dhabi Investment Authority, Carmignac Portfolio, Axis Mutual Fund, Birla Mutual Fund, Loomis Sayles and Neuberger Berman.

Source: BSE

The company has set a price band of ₹54-57 per share. SBFC Finance said that the net proceeds from the fresh issue to the tune of ₹600 crore will be used for expanding its capital base to satisfy future capital requirements.

The company is a non-deposit-taking non-banking finance company (NBFC) offering secured MSME loans, and loans against gold. A majority of its borrowers are entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals.

It primarily caters to customers in tier II and tier III cities, and focuses on serving customers who have a strong credit history but may lack formal proof of income documents.

It has a footprint in 120 cities across 16 Indian states and two union territories, operating through a network of 152 branches.

ICICI Securities Limited, Axis Capital, and Kotak Mahindra Capital Company are the book running lead managers to the Offer. KFin Technologies is the registrar to the offer. The shares are proposed to be listed on BSE and NSE.

A report by SBI Securities says that SBFC IPO is fairly valued, and recommended investors to subscribe for its listing gains at a cut-off price.

A report by Geojit says that, at the upper price band of ₹57, SBFC is available at a valuation that’s lower than its peers. “Considering the lower valuation, consistent improvement in asset quality, and decent business performance, we assign a subscribe rating for the issue on a short-to medium-term basis,” it says.